Proactive - Accounting Solutions

Bill & Audrey

The situation:

Bill and Audrey have operated their cattle property for the last 30 years. Bill had bought the property off his father when he retired and now it was Bill and Audrey’s turn to start slowing down. They have two sons, Bruce and Bob, and a daughter, Mary.

Bruce has always worked on the property, he is married to Clare with two young children and they live on the property in the old farmhouse. Bill and Audrey had built a new home 15 years ago. Bob lives in Brisbane and works in real estate, he is on his second marriage and has children from both marriages. Mary lives and works in town at the local supermarket.

Bill and Audrey want to be fair to all their children but recognise that Bruce has worked hard on the property for little income. Bill does not want to leave the property while he is in good health and wants to still be involved in the running of the property.

What we did:

We had a series of meetings individually with each family member to ascertain their thoughts on what they felt was a fair succession plan for the property and what their personal plans were for the future, starting with Bill and Audrey and then followed by the children.

We then facilitated a round table discussion to come to a solution that met everybody’s needs and ensured that each party was provided for in a fair and equitable manner to avoid any long term family disputes. This was achieved by structuring the property transfer in a way that provided for Bill and Audrey’s retirement needs but was still affordable for Bruce via some use of gifting and vendor finance.

The other two children were provided for in Bill and Audrey’s will from non-farm assets they had accumulated and via Bruce’s purchase of the property.

The result:

The property was successfully transferred from one generation to the next, Bill and Audrey had sufficient retirement funds supplemented by Bruce’s loan repayments over time. Bob and Mary felt that Bruce should have the farm but they were also pleased to be provided for so they did not feel disadvantaged and resentful towards Bruce.